The Principle That the Opportunity Cost Increases as the Production

question 100

Multiple Choice

The principle that the opportunity cost increases as the production of one output expands along the production possibilities curve is the:

• A) law of increasing opportunity costs.
• B) law of demand.
• C) law of supply.
• D) law of diminishing returns.

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Definitions:

Annuity Investment

A financial product typically sold by insurance companies that provides periodic payments to the holder for a defined period of time or for life.

Effective Rate

The interest rate on a loan or financial product restated from the nominal rate as an interest rate with annual compound interest payable in arrears.

Annuity Investment

An economic tool designed to disburse a consistent flow of funds to someone, primarily for retirement preparation purposes.

Effective Interest Rate

The real rate of interest earned or paid on an investment or loan, taking into account the effect of compounding over a specific period.